Why is it So Costly to Go Public? The average first-day returns to investors of initial public offerings (“IPOs”) in the U.S. is 19%. These returns are even higher elsewhere, such as in China. For reference, the S&P 500 index gains only a few basis points a day on average. While a large one-day return… Read More »
Special Purpose Acquisition Company (SPAC) IPO volumes have surged in recent years (Figure 1). In 2020-2021, SPAC’s IPO volume reached more than $200 billion. Merging with a SPAC has become an important mechanism for private companies to go public. Since 2010, 417 SPACs have merged or announced a merger with private firms. These mergers created… Read More »
By the end of 2020, more than 240 special-purpose acquisition companies (SPACs) listed in the U.S. (on NASDAQ or the NYSE), raising a record $83 billion, according to SPAC Research. SPACs have already surged past last year’s record in the first quarter of 2021, raising $98.1 billion. These numbers are eye-catching. In 2007, the average… Read More »
Introduction Special-Purpose Acquisition Companies (SPACs) have been widely discussed over the past year. According to the U.S. Securities and Exchange Commission (SEC), a SPAC is created specifically to pool funds in order to finance a merger or acquisition opportunity within a set time frame. A SPAC has 24 months after the initial public offering (IPO)… Read More »